Report slams energy profits

Energy network owners must be living in a parallel universe if they think Australia’s agricultural sector should be pleased to be paying unjustified profits, according to National Irrigators’ Council chief executive officer Steve Whan.

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Energy network owners must be living in a parallel universe if they think Australia’s agricultural sector should be pleased to be paying unjustified profits, according to National Irrigators’ Council chief executive officer Steve Whan.

The NIC, on behalf of the Agricultural Industries Energy Taskforce, recently released a report that showed the energy networks had collectively earned economic or monopoly profits of $2.1 billion.

“That’s $2.1 billion more profit than is justified,” Mr Whan said.

“In response, Energy Networks Australia didn’t bother to deny the profit, instead they stretched the credulity of any Australian energy user by claiming on twitter that ‘higher profits equals lower power bills for customers’.

“In the interesting logic behind this they try to claim that these excessive profits are the result of ‘efficiencies’ and that these profits will be handed back to customers in future price determinations.

“I, for one, feel that these companies are telling us not to worry about the jobs being lost or our export markets disappearing as we become less competitive — don’t worry about a thing because eventually they will give us some of the money back!

“As I see it the networks are being disingenuous, we are quite happy for them to make reasonable profits and be efficient operators.

“Let’s be clear we have no problem with incentive regulation and we are not calling for a rate of return regulation.

“What this study found is that networks as a group are making super-normal profits because in the real world they are low risk and consequently have low financing costs, not because they are outperforming.”